Royal Bank of Scotland has set aside £856m to cover charges for past misconduct and litigation, helping push the lender to a loss in the first quarter.  

The charges include £334m to cover issues relating to alleged foreign exchange manipulation. 

The bank said it was in advanced discussions over a settlement in relation to a criminal investigation conducted by the US Department of Justice and other authorities. 

RBS, which owns Ulster Bank, was one of six banks fined a combined $4.3 billion for failing to stop traders trying to manipulate currency markets last year. 

Rival Barclays, which has yet to settle with regulators over the matter, yesterday set aside another £800m to cover the issue. 

RBS, which is 80% owned by the UK government, made an operating profit of £1.63 billion in the first quarter, up 16% on the same time a year ago. 

The improved performance was clouded by a number of one-off charges, resulting in RBS posting an attributable loss of £446m, compared with a £1.2 billion profit a year ago.

Restructuring charges cost the bank £453m. It also set aside £100m to cover compensation for the mis-selling of loan insurance and £257m for other customer compensation, mainly relating to paid-for accounts.